Wednesday, June 29, 2005

Liability for Infringement by Users of Peer-to-Peer File-Swapping Technology

As you are no doubt aware, the United States Supreme Court ruled that makers of peer-to-peer file-swapping software can be subject to liability for the copyright infringement made possible by their products.

I had not been terribly sympathetic with the music industry, which was suffering so due to the music pirating “people (especially the young) [who] use file sharing software to download copyrighted works.” I understand that the starving artists receive a mere pittance of the proceeds from the record sales, as compared to the millions the corporate members of the RIAA reap. I also understand that copyright exists to encourage innovation, so there will exist incentive for the recording companies to invest in the efforts of the musicians, thus making music available to the public. Copyright also protects the artists, so they will have incentive to create.

In Sony Corp. of America v. Universal City Studios, Inc., the Supreme Court held that the sale of copying equipment – VCRs – does not constitute contributory infringement if the product is widely used for legitimate, unobjectionable purposes. The equipment need merely be capable of substantial noninfringing uses for the manufacturer to be free from liability.

In Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., the Supreme Court held that “[D]istribut[ion] [of] a device with the object of promoting its use to infringe copyright” makes the distributor or software maker “liable for the resulting acts of infringement by third parties.” Justice Souter said the plaintiffs are entitled to a trial to prove their accusations that the file-sharing companies were in business primarily to enable and induce computer users to find and download copyrighted material, of which there is ample evidence.

These cases are easily reconcilable. If your primary purpose is to enable infringement, you will be liable, despite substantial noninfringing uses. This is unfortunate for artists who want their music distributed via peer-to-peer file-swapping, for innovation in music that would benefit from peer-to-peer file-swapping, and for innovation in computer programs that would allow peer-to-peer file-swapping.

Jeff Tweedy, the leader of the rock band Wilco, and Lawrence Lessig, a Stanford University law professor who opposes criminalizing file sharing, participated in a discussion titled "Who Owns Culture?" sponsored by Wired magazine, in New York; they stated that “the Web, in an age where conglomerated FM radio has squeezed out virtually all possibility of hearing anything worthy and new, is where fans are best exposed to music they might want to buy…. [T]he decision to outlaw downloading would have a profoundly inhibiting effect on the creation of culture.”